By: Murphy, et al. (Senate Sponsor - Campbell) H.B. No. 4388
(In the Senate - Received from the House May 7, 2019;
May 10, 2019, read first time and referred to Committee on
Education; May 17, 2019, reported favorably by the following vote:
Yeas 11, Nays 0; May 17, 2019, sent to printer.)
Click here to see the committee vote
A BILL TO BE ENTITLED
AN ACT
relating to the management of the permanent school fund by the
School Land Board and the State Board of Education.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 43, Education Code, is amended by adding
Section 43.0052 to read as follows:
Sec. 43.0052. QUARTERLY REPORTS. Each quarter, the State
Board of Education shall provide to the School Land Board a
financial report on the portion of the permanent school fund assets
and funds for which the State Board of Education is responsible.
The report must include:
(1) target and actual asset allocations, by asset
type, based on fair market value or net asset value;
(2) investment performance by asset type; and
(3) benchmarks and benchmark performances.
SECTION 2. Subchapter C, Chapter 32, Natural Resources
Code, is amended by adding Section 32.068 to read as follows:
Sec. 32.068. QUARTERLY REPORTS. Each quarter, the board
shall provide to the State Board of Education a financial report on
the portion of the permanent school fund assets and funds for which
the board is responsible. The report must include:
(1) target and actual asset allocations, by asset
type, based on fair market value or net asset value;
(2) investment performance by asset type; and
(3) benchmarks and benchmark performances.
SECTION 3. Section 51.402(c), Natural Resources Code, is
amended to read as follows:
(c) Notwithstanding Subsection (a), on January 1 of each
even-numbered year, the market value of the investments [in real
estate] under Subsections (a)(6) and (8) [this section on January 1
of each even-numbered year] may not exceed an amount that is equal
to 15 percent of the market value of the permanent school fund on
that date.
SECTION 4. Subchapter I, Chapter 51, Natural Resources
Code, is amended by adding Section 51.414 to read as follows:
Sec. 51.414. PERMANENT SCHOOL FUND LIQUID ACCOUNT. (a) The
permanent school fund liquid account is established as an account
in the permanent school fund in the State Treasury to be used by the
board and the State Board of Education as provided by this section.
(b) Each quarter, the board shall hold a meeting and adopt a
resolution to release from the real estate special fund account
funds designated under Section 51.401 that are not being used for a
purpose listed in Section 51.402(a) and are not required for the
board's anticipated cash needs for the 90-day period following the
date of the meeting, to be deposited to the credit of the permanent
school fund liquid account in the State Treasury.
(c) The State Board of Education may invest funds in the
permanent school fund liquid account. The investments may be made
only in liquid assets, in the same manner that the permanent school
fund is managed by the State Board of Education.
(d) Investment income and realized capital gains derived
from funds in the permanent school fund liquid account shall be
deposited in the State Treasury to the credit of the State Board of
Education for investment in the permanent school fund. This
subsection does not require a deposit if the market value of the
assets held in the permanent school fund liquid account is below
cost.
(e) The State Board of Education may use funds in the
permanent school fund liquid account to pay for administrative
costs associated with implementing this section, including costs
associated with contracts for professional investment management,
investment advisory services, or custodial services.
(f) The board shall provide to the State Board of Education
in each quarterly report required by Section 32.068 the board's
anticipated cash needs for the six-month period following the date
of the report, to allow the State Board of Education to ensure that
the board's cash needs may be met as provided by Subsection (g).
(g) Not later than the fifth business day after the date of a
request of the board, the State Board of Education shall release
from the permanent school fund liquid account funds to be deposited
to the credit of the real estate special fund account in the State
Treasury in an amount requested by the board.
SECTION 5. This Act takes effect September 1, 2019.
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